Breaching consumer protections can be a costly business!

The Australian Consumer Law (ACL) and Motor Vehicle Dealers Act (MVDA) provide a range of protections to consumers. A recent decision in the Rockingham Magistrates Court shows that the law takes a serious view of these protections, and that businesses could suffer severe penalties for breaching them.

The decision involved the sale of a caravan by consignment. Selling by consignment occurs when a dealer sells a vehicle on behalf of a private seller in return for a commission on the sale.  In this case, a private seller engaged a Rockingham car dealer, Rockingham Windsor and Statewide Cars and Commercials, to sell a caravan for the price of $50 000; the dealer’s cut was a $2000 commission. The dealer received an offer for $40 000 for the caravan, which the private seller accepted.  Eventually, the dealer managed to sell the caravan for the original price of $50 000. However, the dealer led the seller to believe that the sale price was only $40 000.

The Rockingham Magistrates Court held that this amounted to a false and misleading representation in breach of the ACL. The dealer was also held to have breached provisions of the MVDA.

The dealership and its sole director were ordered to pay a total of over $40 000 in fines and court costs.

The ACL provisions apply to the sale of goods and services in many industries, not just the motor vehicle industry. Both consumers and businesses should be aware of their rights and obligations under the ACL to avoid unhappy outcomes.

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Michael Duncan